diff --git a/lib/ansible/runner/__init__.py b/lib/ansible/runner/__init__.py
index 07bae90879..e3deedc56a 100644
--- a/lib/ansible/runner/__init__.py
+++ b/lib/ansible/runner/__init__.py
@@ -335,11 +335,13 @@ class Runner(object):
             if not found:
                 results=dict(failed=True, msg="could not find src in first_available_file list")
                 return ReturnData(host=conn.host, results=results)
-        
-        if self.module_vars is not None:
-            inject.update(self.module_vars)
+       
+        if self.module_vars is None:
+            self.module_vars = {}
+        lookup_table = self.module_vars.copy()
+        lookup_table.update(inject)
 
-        source = utils.template(source, inject)
+        source = utils.template(source, lookup_table)
         source = utils.path_dwim(self.basedir, source)
 
         local_md5 = utils.md5(source)
@@ -361,7 +363,7 @@ class Runner(object):
 
             # run the copy module
             args = "src=%s dest=%s" % (tmp_src, dest)
-            exec_rc = self._execute_module(conn, tmp, module, args, inject=inject)
+            exec_rc = self._execute_module(conn, tmp, module, args, inject=lookup_table)
         else:
             # no need to transfer the file, already correct md5
             result = dict(changed=False, md5sum=remote_md5, transferred=False)
@@ -440,7 +442,6 @@ class Runner(object):
         options  = utils.parse_kv(self.module_args)
         source   = options.get('src', None)
         dest     = options.get('dest', None)
-        metadata = options.get('metadata', None)
         if (source is None and 'first_available_file' not in self.module_vars) or dest is None:
             result = dict(failed=True, msg="src and dest are required")
             return ReturnData(host=conn.host, comm_ok=False, result=result)
@@ -459,17 +460,19 @@ class Runner(object):
                 result = dict(failed=True, msg="could not find src in first_available_file list")
                 return ReturnData(host=conn.host, comm_ok=False, result=result)
 
-        if self.module_vars is not None:
-            inject.update(self.module_vars)
+        if self.module_vars is None:
+            self.module_vars = {}
+        lookup_table = self.module_vars.copy()
+        lookup_table.update(inject)
 
-        source = utils.template(source, inject)
+        source = utils.template(source, lookup_table)
 
         # install the template module
         copy_module = self._transfer_module(conn, tmp, 'copy')
 
         # template the source data locally
         try:
-            resultant = utils.template_from_file(self.basedir, source, inject)
+            resultant = utils.template_from_file(self.basedir, source, lookup_table)
         except Exception, e:
             result = dict(failed=True, msg=str(e))
             return ReturnData(host=conn.host, comm_ok=False, result=result)
@@ -478,7 +481,7 @@ class Runner(object):
             
         # run the COPY module
         args = "src=%s dest=%s" % (xfered, dest)
-        exec_rc = self._execute_module(conn, tmp, copy_module, args, inject=inject)
+        exec_rc = self._execute_module(conn, tmp, copy_module, args, inject=lookup_table)
  
         # modify file attribs if needed
         if exec_rc.is_successful():
diff --git a/lib/ansible/utils.py b/lib/ansible/utils.py
index 8220a5d20b..89f1fa7cc5 100644
--- a/lib/ansible/utils.py
+++ b/lib/ansible/utils.py
@@ -211,9 +211,7 @@ def template_from_file(basedir, path, vars):
     environment = jinja2.Environment(loader=jinja2.FileSystemLoader(basedir), trim_blocks=False)
     data = codecs.open(path_dwim(basedir, path), encoding="utf8").read()
     t = environment.from_string(data)
-    # FIXME: possibly a bit inefficient here, do this in runner code
     vars = vars.copy()
-    vars['hostvars'] = vars.get('setup_cache',{})
     res = t.render(vars)
     if data.endswith('\n') and not res.endswith('\n'):
         res = res + '\n'